This question isn’t necessarily so complicated that you need to have a vast understanding of the markets or hire an advisor who does. If you’re like most of us, you just want to understand how different types of savings accounts can affect your money over time.

Earning money from your savings and investments is actually pretty easy — put money in an account, and it grows.

But why that happens is kind of complicated. That can make choosing the best account pretty difficult.

So we’ve broken it down. Here’s what happens when you save money in certain ways, why it happens and what that means for long-term savings and retirement planning.

For our example, imagine you’re 30 years old, earn between $36,000 and $91,000 per year (the most common tax bracket) and plan to retire at 67.

To keep things simple, say you save $100. Let’s see what happens to that money when you pick each of six common strategies.

1. Under the Mattress: $100

The simplest and, some believe, safest way to save your money is under the proverbial mattress.

I’d be remiss if I didn’t point out that, at this point, the mattress has got to be the first place any thief will look for cash, so maybe get more creative. But that’s neither here nor there…

If you avoid investing or savings accounts and tuck your money in a safe space somewhere today, what will you have when you retire?

You can do this math in your head: In 37 years, you’ll have $100 in cash.

2. Average Free Savings Account: $102

If you want a little more security, you could stick your $100 in an FDIC-insured savings account at the bank.

If you go with your bank’s basic free account, you’ll probably earn interest at the average rate (APY) of 0.06%.

After 37 years, you’ll have… $102.24.

That 0.06% is not very much, not even when compounded over time.

On any savings account, you’ll also pay taxes on the interest you earn each year. In this case, it would be almost nothing, but note it in case you’re working with a larger amount of money.

3. High-Yield Savings Account: $531

How much difference can a better savings account make? It might surprise you!

While your returns on a typical savings or checking account will be minimal, a high-yield savings account could actually move the needle.

Deposit $100 into a 5% APY savings account today, and in 37 years, it will be $608.19 with interest. If you avoid bank fees and pay 15% in taxes on the interest each year — $76.23 total — you’ll be left with a total of $531.96.

You could also deposit the money into a high-yield checking account. But we generally assume you’ll regularly spend and withdraw money from a checking account, which would have a huge impact on the interest it will yield over time.

4. Traditional IRA: $1,039

Now let’s talk about retirement accounts.

Your workplace 401(k) or individual retirement account (IRA) are more complicated to forecast, because their return is dependent on the markets and they fall under special tax rules.

5. Roth IRA: $1,222

The major difference is your contributions to a Roth IRA are after-tax dollars. So you’ll pay taxes on that money as you earn it and no federal tax when you withdraw in retirement.

Invest your $100 in a Roth IRA at a 7% return over 37 years and it will be $1,222 when you’re 67.

Enter your contributions into this calculator to see your own potential return.

6. 401(k) With an Employer Match: $2,445

There’s one major reason everyone you know says you have to contribute to your workplace 401(k): free money.

That’s because many employer-offered 401(k) plans come with a match. When you contribute to the account, your employer will contribute the same amount, up to a set percentage of your salary.

And as with an IRA, that money grows over time. We’ll do the math with the commonly used rate of return of 7%.

Let’s say you contribute $100 today, and your employer matches 4%. Since you make between $36,000 and $91,000, your employer will match your $100 contribution (it’s much less than 4% of your salary). Your starting balance will be $200, and you won’t contribute anything else.

What you can see from these hypothetical cases is how important it is to understand where your money is going.

The difference between an IRA and a 401(k) may not seem striking when you invest $100 one time… but imagine what it looks like when you invest $60,000 over the next 37 years!

It’s more than a shocking number — it could mean the difference between comfort and struggle in retirement.

If you’re not ready to make the decision on your own, we encourage you to consult a financial advisor. Just keep an eye out for these red flags to make sure you’re getting the best advice you can find!